As indicated in its pre-close trading update (Anite: powerful end to a good year), Anite posted upbeat results for the year ending April 30 2012 with the highlights being the handset testing business (which was expected), and the travel unit that has been experiencing a slow comeback over the last year. Network testing did not have great year but its fortunes are tied to LTE (4G) adoption so it’s time will come.
The company closed the year with double the profit of last year (£18.5m vs £9.4m) on revenue from continuing operations that was up 31% to £122.5m. Operating profit also soared, rising 64% to £23.8m, while the operating margin jumped from 19% to 24%. The handset testing business was the driver for improved revenues and margins, with strong demand for LTE (4G) handset testing and higher than expected demand for 2G/3G products. Anite is successfully riding old and new technology waves, which is providing a degree of current and future security.
Operating profit for the network testing division was down on the year before but H2 saw an increase in order intake and revenue. It can do little about it, but Anite must surely be starting to feel a sense of frustration given the wait for LTE network rollouts (the UK appears to be well behind the curve in terms of preparation). Although the US is an early adopter, rollouts elsewhere are anticipated over the next few years (a timeframe Anite has been working to for some time).
Caught somewhat on the hop last time around, Anite prepared early for LTE and is benefitting. The area has high barriers to entry which helps protect Anite’s position but the longer the wait for rollouts, the greater than chance of increased competition. The company is confident but conservative when it comes to fiscal 2013 and is not making the mistake of thinking it has an unassailable position in the market. It is expecting revenue growth in the handset testing division to be in the low to mid teen percentage range, while network testing is anticipated to be in the mid single digit percentage growth range.